Recently, Alloy acquired DBG, while Dreamworks acquired Awesomeness TV.

Terms of the Alloy/DBG deal were not disclosed.  Dreamworks paid $33 million for AwesomenessTV, with earnouts pushing the deal up to a deal size of $123 million.

The companies have some similarities, as they all operate in the video space.  Both targets (DBG and AwesomenessTV) have a repping business on top of their core: AwesomenessTV produces content, but as a multichannel network (MCN) on YouTube, it has aggregated 55,000 other channels who share a similar demographic.  Other MCNs include Machinima and Maker Studios.

I’m personally a bit cynical on the long-term viability of MCNs, though invariably the top few will have big businesses when the market shapes up.  Anyway, DBG produces its own content (most of which was created for sponsors), but the bulk of its business is the distribution of content and advertisement across a network of third-party sites.  As such, both businesses have “owned-and-operated” dynamics with a representation layer.  Also similarly, neither had an actual “owned-and-operated” web property, focusing instead on distributing content on other sites:  DBG on mid to long-tail sites, AwesomenessTV on YouTube.

Until fairly recently, an audience built on YouTube wasn’t deemed valuable at all.  But then once people realized that YouTube was the main hub where people actually watched videos — and Google paid $100 million for content and investors took notice – -then YouTube went from pariah to the belle of the ball.

AwesomenessTV focuses exclusively on YouTube.  As an earlier entrant in the online video landscape, DBG instead focused everywhere else.  Early on, when marketers were adverse to YouTube, this was a sound strategy.  Today, it’s not.  It’s worth noting that until a year ago Alloy itself had fairly little exposure to YouTube, but that all changed when Alloy bought Smosh and ClevverTV, giving them a sizable footprint on YouTube.

While DBG showed high reach on comScore, the reality was that a distributed model just isn’t as attractive as having a large audience on one property.  Naturally marketers prefer if the property in question is a producer’s owned-and-operated website, but by 2013 it’s pretty clear that that is wishful thinking and not going to happen; at best you have a large audience on YouTube, where people come to watch videos.  Since YouTube partnered with comScore (and thanks to Google’s robust Analytics platform), then an audience on YouTube is as good as it gets.

YouTube has gone from a promotional platform to a commercial platform in about two years, while the syndicated Web seems to have fallen out of favor.  Let’s face it: bundling content in a player and then distributing it all over the Web is tough to monetize and will only get tougher.

DBG’s decision to sell to Alloy is a reflection that its branded business wasn’t going to grow fast enough, or grow to be big enough (despite all of the hype around native advertising)  –and that with no presence on YouTube, its “consumer-facing” business was nonexistent.  It needed to catch up, and partnering with Alloy was a “good enough” solution.  But because an audience on YouTube doesn’t come with a shortage of obstacles and headaches, Alloy is basically buying DBG’s distribution network to ensure that it has beyond-YouTube reach.

That decision to hedge from YouTube isn’t all that different than when LA-based The Collective (not to be confused with the NY-based display ad network Collective) bought Metacafe, despite having a large enough footprint on YouTube. (The grass, my friends, is always greener on the other side).

As is often the case in these deals, sometimes these decisions make sense when you consider the pedigree.  DBG was founded by Chris Young, who previously sold Klipmart to Doubleclick; he becomes Alloy’s chief marketing officer.  AwesomenessTV wasn’t coveted by Dreamworks for the 55,000 channels or 14 million claimed subscribers — it was founded by Brian Robbins, whose acting credits include “Head of the Class” and producing credits include “Smallville.”  If that wasn’t enough, AwesomenessTV lists a who’s who of backers, including Mark Terbeek of MK Capital, UTA’s co-founder and CEO Jeremy Zimmer, Machinima founder Allen DeBevoise, MediaLink CEO Michael Kassan, Greycroft Venture Partners, New World Ventures and Matt Coffin, founder of LowerMyBills.

While DBG most likely had more reach and revenues, it should be abundantly clear which one of these two deals was more lucrative.  Whether or not that means that the Dreamworks/AwesomenessTV is a crazy outlier, or a shift in the online video and M&A market, remains to be seen.